Jagged Peak Energy to Consider Expanding With Permian Acquisitions

(Bloomberg) -- Jagged Peak Energy Inc. is considering expanding its footprint in the oil-rich Permian Basin of West Texas and New Mexico, according to people with knowledge of the matter.

The oil and gas company, with a market value of $2.2 billion, is working with an adviser to pursue bolt-on acquisitions, said the people, who asked not to be identified because they weren’t authorized to speak publicly. Jagged Peak has several potential targets in mind, the people said.

Jagged Peak’s largest shareholder is the private equity firm Quantum Energy Partners, which started the company in 2013 with a $400 million investment. It now owns 69 percent of Jagged Peak’s shares, according to data compiled by Bloomberg.

Denver-based Jagged Peak operates entirely in the Permian, with its acreage located in the southern portion of the region’s Delaware Basin.

A spokesman for Jagged Peak declined to comment.

North American energy explorers and producers in the booming Permian are facing pipeline bottlenecks that have pushed crude prices lower, spurring some to consolidate. In November, Cimarex Energy Co. announced a $1.6 billion deal including debt to buy peer Resolute Energy Corp., while Endeavor Energy Resources LP has received interest from multiple potential bidders including Chevron Corp. and Exxon Mobil Corp.

Jagged Peak is seeking partners for its Big Tex acreage in Pecos County, Texas. Jagged Peak Chief Executive Officer James Kleckner said on a call last month that the company hopes to have “clarity on that arrangement ahead of year-end.” If the company fails to reach a final deal, Jagged Peak’s capital budget will remain “flexible,” he said.

Jagged Peak went public in January 2017, raising $474 million at $15 a share, falling short of its $650 million target, according to data compiled by Bloomberg. Shares are down about 38 percent since a high this year of $16.31 in January. Jagged Peak rose 1.4 percent to $10.15 in New York on Wednesday.

To contact the reporters on this story: Kiel Porter in New York at kporter17@bloomberg.net;Rachel Adams-Heard in Houston at radamsheard@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, ;Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha, Matthew Monks

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